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Mr. Pieter J. Doerr
COBRA Compliance Systems, Inc.
15 E. Washington Street
P.O. Box 889
Coldwater, Michigan 49036-0889
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1999-14A
ERISA Sec. 606
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Dear Mr. Doerr:
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This is in reply to your request for an advisory opinion regarding the
continuation coverage provisions applicable to group health plans under Part
6 of Title I of the Employee Retirement Income Security Act of 1974, as
amended (ERISA).
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Under Part 6, which was added to ERISA by the Consolidated Omnibus Budget
Reconciliation Act of 1985 (COBRA), group health plans are required to offer
temporary extension of health coverage (called “COBRA continuation
coverage”) at group rates to employees, spouses and dependent children in
certain instances where their coverage under the plan would otherwise end.(1)
Section 606(a)(1) of Title I of ERISA provides that the covered employee and
his or her covered spouse must receive a notice informing them of their
COBRA rights and describing certain provisions of the law (the “Initial
Notice”) at the time they commence coverage under a group health plan
subject to Part 6. Section 606(a)(4) provides that, upon the occurrence of a
qualifying event described in section 603, the plan administrator must give
covered employees, spouses and dependent children who are qualified
beneficiaries a specific notice of their right to elect COBRA coverage as a
result of that event (the “Election Notice”). The type of qualifying
event will determine who the qualified beneficiaries are and the required
amount of time that a plan must offer continuation coverage to them under
COBRA. Pending the issuance of regulations under these COBRA notice
provisions, employers and plan administrators are required to operate in
good faith compliance with a reasonable interpretation of the statutory
provisions. See H.R. Rep. No. 99-453, 99th Congr., 1st Sess. at 563 (Dec.
18, 1985).
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You note that in ERISA Technical Release 86-2 (issued June 26, 1986), the
Department stated that where the spouse’s last known address is the same
as the covered employee’s, it would consider that an employer or plan
administrator has made a good faith effort at compliance with ERISA §
606(a)(1) if the Initial Notice is given through a single mailing by first
class mail addressed to both the covered employee and the covered spouse.
You ask whether the Department will consider a single mailing addressed to
the covered employee, his or her spouse, and dependent children (if any)
residing at the same address at the time of the notification to be good
faith compliance with the Election Notice requirements of ERISA §
606(a)(4).
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It is the Department’s position that ERISA § 606(a)(4) gives each
qualified beneficiary a separate right to receive a written Election Notice
upon the occurrence of a qualifying event permitting him or her to exercise
COBRA continuation rights. This requirement may, in some cases, be met by
mailing one Election Notice where more than one qualified beneficiary
resides at the same address. Where, at the time of the notification, the
last known addresses of the covered employee, his or her spouse, and
dependent children (if any) are the same, the Department will consider a
single first class mailing addressed to the covered employee, his or her
spouse, and dependent children (if any) to be good faith compliance with the
Election Notice requirements of ERISA § 606(a)(4) in the absence of
regulations provided that a separate election notice for each qualified
beneficiary is included in the single mailing or, if a single notice is
sent, it clearly identifies the qualified beneficiaries covered by the
notice and clearly explains the separate and independent right each has to
elect COBRA continuation coverage. This letter addresses the factual
situation presented in your letter and should not be read as indicating the
only way a single mailing may be used to satisfy the Election Notice
requirements where more than one qualified beneficiary resides at the same
address. See, e.g., ERISA § 606(c).
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This letter constitutes an advisory opinion under ERISA Procedure 76-1, 41
Fed. Reg. 36281 (1976). Accordingly, this letter is issued subject to the
provisions of that procedure, including section 10 thereof, relating to the
effect of advisory opinions.
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Sincerely,
John J. Canary
Chief, Division of Coverage, Reporting and Disclosure
Office of Regulations and Interpretations
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The COBRA amendments added
substantially similar provisions to the Internal Revenue Code and the
Public Health Service Act. The Internal Revenue Service, the
Department of Health and Human Services, and the Department of Labor
each has certain regulatory authority in this area. See H.R. Rep. No.
99-453, 99th Congr., 1st Sess. at 562-563 (Dec. 18, 1985). The COBRA
provisions in Part 6 generally apply to group health plans covered by
Title I of ERISA, but they do not apply to a “group health plan for
any calendar year if all employers maintaining such plan normally
employed fewer than 20 employees on a typical business day during the
preceding calendar year.” ERISA § 601(b). COBRA also applies to
group health plans sponsored by state and local governments, but those
provisions are administered by the U.S. Public Health Service within
the Department of Health and Human Services.
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